Quantum,
I also live in a house with roomates, only 3 of use right now (more to come) and we all use torrents. One of the guys insists on keeping a high upload and I can't play any fps games because of the constant lag and spiking pings. I spent a week or so learning and trying different things to improve the connection status and this is what I found:
QoS (Quality of Service) tab in my router settings solves all my lag problems!
I have a linksys wrt54g wireless router. I upgraded the firmware to dd-wrt (an open source firmware with many features including QoS). Under this QoS tab, there is a setting to manually set a max cap for upload and download. I set these to 85% of my true connection speed - this supposedly keeps your ping low even when you max your connection but I do more than just this. There is a services priority category where you can set proirities for different protocols. I set my chat and games programs like aim, http, ventrilo, half-life to the premium setting and p2p services like emule and bittorrent to the bulk setting. After doing this, when I go to open up a new webpage and the connection is maxed out, that http service gets priority and I don't have to wait for any lag and the webpage opens up right away! Lastly, I don't tell my router unsavy roomates about this but I set the mac address to my computer to recieve priority over their computers. Low and behold all these settings give me ultra low pings for everything even when my roomate is uploading on unlimited! My computer doesn't show any form of lag whatsoever when my connection is maxed out. Having no lag satisfies me and being able to upload at unlimited satisfies my roomate. A win win situation. I think all routers should have this setting.
Hope this helps anybody who has to deal with sharing a connection like I do.
P.S. You can still kill the router's speed if you let your P2P programs open up too many connections - as Quantum stated (the router can only handle so many). Keep that in mind.
-akalol111